Everyone needs an Estate Plan. Everyone.
There is no excuse for not making an estate plan.
Almost everyone should have a will.
For some folks with simple estates and families, beneficiary designations and joint ownership avoids the need for a will entirely. Learn more about simple estates here.
For everyone else, dying without a will imposes high financial and emotional costs on your family. It could have disastrous results for your common law partner. Learn about the ‘high cost of no will’ here.
Everyone needs a POA property
A proper power of attorney enables someone to manage your finances for you.
Incapacity – whether from injury, illness or accident – is very common, can occur any time and life, and can last for year. The emotional and financial costs of incapacity will always be are high. Do not make the situation worse by failing to appoint an attorney for property.
If there is no valid POA document, an application to the Courts to appoint a guardian may be required. If so, the costs of getting a ‘guardian’ appointed are potentially enormous.
Learn more about valid powers of attorney for property here.
Estate Plans defined
An estate plan is more than just a will. It encompasses all of the things that need to be dealt with upon your death – from life insurance and pensions, to jointly owned property, beneficiary designations, and things that you do not ‘own’ but that may be very important such as Facebook and LinkedIn accounts.
Learn more about estate plans here.
What will is right for you?
For most people, preparing a will should be ‘straightforward but not simple’.
Estate planning is at its simplest when your life resembles Beaver Cleaver. If you:
- Remain married to your one and only spouse;
- Know that your spouse will outlive you and to remain competent to manage your/their finances when you die;
- Want your married spouse to inherit 100% of your assets and be free to do with them as they choose (i.e. they, not you get to chose who inherits after they die);
- Or, are single (for instance a widow) and will never have another partner, and want your children to inherit equally your entire estate;
- Have no need for deferral of distribution of your estate after your death; your estate is to be distributed in full on your death (no trusts);
- Own no real estate other than your principle residence and it is in Ontario; and,
- Own no investments or assets of value outside your pension/RRSP/RRIF and perhaps life insurance and a TFSA
then it is possible to develop a fairly simple plan that either avoids a will entirely or only requires a very simple will, and that is fair, effective, and tax-efficient.
When money is tight and your needs are simple (as described in the list above), an online will may be sufficient and good value for you. Learn more about will options here.
If your life differs from any one of the above, then ‘a really simple’ estate plan is out of the question.
Factors that commonly complicate estate plans include:
- owning property outside Ontario;
- real estate that is not a principle residence and likely to create significant income tax on death (for instance, a cottage);
- obligations to a former spouse from separation or divorce (alimony/support/property division);
- living in a common law relationship;
- having been divorced, and now having a new partner you wish to provide for;
- wanting your children who are not children of your current partner to inherit, perhaps after your partner dies;
- blended families (children from previous relationships);
- a desire to make gifts to minors (children under 18);
- a desire to provide for someone on ODSP;
- a desire to provide for someone incapable of managing their own finances (for health, addition, or spendthrift reasons);
- a desire to defer distribution of some or all of the estate after your death (trusts – commonly for your spouse or children)
- children estranged from your partner, or from you, or from each other;
- a desire to disinherit one or more children or to have an unequal distribution of your estate.
You may be uncertain whether your will is valid or your estate plan works. We offer a very prompt, low-stress, fixed fee service for evaluation and advice.
Like all insurance, estate plans should be ‘modest spending now’ to avoid much larger bills later. More complex estate plans require sophisticated advice from experienced lawyers, but can save tens of thousands of dollars in tax, and spare your survivors countless hours of effort and acrimony.